LA JOLLA, Calif. — About a half century ago, a barren ocean bluff here started sprouting research institutions, turning a backwater Navy town into a much-envied icon of high-tech jobs and biomedical discoveries.
But after years of plunging federal grants and nagging national economic difficulties, the independent institutes on Torrey Pines Mesa are at a crossroads. Some are being forced to consolidate or merge with larger organizations to survive. Others are placing risky bets on drug discovery work-for-hire.
If the new strategies aren’t successful, the financial integrity of the institutes could be challenged — disrupting the life science ecosystem of the region, potentially leading to a collapse of the biotech cluster if its traditional strengths dissolve.
Historically, San Diego’s multiple independent facilities gave the region a distinct advantage: “It is a more competitive environment, creating more opportunities for entrepreneurial researchers,” said Joseph Cortright, an economist who studies biotech clusters for the consulting firm Impresa.
Given unfolding events, however, such opportunities may become more limited.
For instance, the Scripps Research Institute, independent for 25 years, now is seeking a deep-pocketed partner. “We are making no secret of it,” Scripps’ president Steve Kay told STAT. “We are in talks with high-quality, clinical centers about merging.”
It’s not the first time. In 2014, Scripps came very close to being subsumed by the University of Southern California in Los Angeles. Under the proposed union, Scripps was to annually receive $15 million for 40 years.
But the pact could also have led to USC “dissolving the institute and taking the assets,” said Kay. A key asset includes the institute’s leased site — a quintessential California location overlooking a world famous golf course, surf reef, and nudist beach. (Some observers suspect USC again may appear in the white knight role, but one less threatening to Scripps’ autonomy.)
Even the university here is not immune to what are seen as academic hijackings by barbarians at the gate.
Last year, USC undertook a cloak-and-dagger academic recruitment that lured away neuroscientist Dr. Paul Aisen from the University of California, San Diego, with a $500,000 salary. A legal battle continues for who gets to control a prestigious, federally funded Alzheimer’s drug research project that Aisen effectively has moved to USC.
All this wheeling and dealing has brought a wave of tension to a research community where some break to surf during the lunch hour. And the threatened San Diego model has national implications — because if the storied region is diminished, it doesn’t bode well for those seeking to emulate it.
“San Diego has venture capital for new businesses because they have multiple, experienced institutional actors,” said Cortright. Only Boston and the San Francisco Bay area rank higher in desirable categories like venture capital, patents, and jobs.
Cortright is among analysts who have questioned huge expenditures of public money in hopes of creating biotech hubs, without the historical infrastructure and culture. “You can bribe someone into creating a research outpost, but there is very little evidence these places are commercially productive,” Cortright said.
In the mid-2000s, then-Florida Governor Jeb Bush started one of the more ambitious campaigns, providing $1 billion to three San Diego-based institutes to start operations from scratch: Scripps received $600 million for a campus in Jupiter; Sanford Burnham Prebys Medical Discovery Institute $300 million in Orlando; and the Torrey Pines Institute for Molecular Studies $100 million for Port St. Lucie.
Yet, during that period, Florida’s share of venture capital stayed constant — about 1 percent annually, Cortright’s research has shown. Faced with such results, Florida officials have in the last two years slapped down several new research funding requests for the San Diego institutes’ progeny.
Sunshine state expansion was once seen as a path to sustainability for these institutes. Now, several La Jolla scientific leaders are scrambling to forge future successes from philanthropy in a money chase that’s like free-agent competition in sports, but for the mega-rich.
The Sanford Burnham has followed a go-big mantra, corralling select mega donors that have helped make the 40-year-old institute’s name resemble that of a law firm. The most recent partner, real estate mogul Conrad Prebys, pledged $100 million last year.
That prize followed an unsuccessful attempt by Sanford Burnham leaders to forge a partnership with Scripps, sources note.
At the Salk Institute for Biological Studies, the board leadership includes at least two billionaires. They have led a philanthropic campaign that has collected $275 million in assorted pledges toward a $300 million goal.
The task of capitalizing on this largess will fall to the institute’s new leader, Elizabeth Blackburn — a Nobel Prize-winning aging researcher who on Jan. 1 became the first female president in the Salk’s 56-year history. Without discussing specifics, Blackburn said that her goal is “to build on what has been successful at the Salk.”
Some institutes, which have traditionally hummed along on federal research grants, are also now turning more to the drug industry as sources of financial support.
At Scripps, Chief Executive Peter Schultz, an entrepreneurial chemist, is focused on securing industrial or philanthropic funding to run high-volume screens of molecules to discover new drugs. And at Sanford Burnham, Dr. Perry Nisen, a physician-scientist who became CEO in 2014 after previously shepherding drug candidates to market for GlaxoSmithKline, is directing what he called “professional drug discovery,” with about 80 pharmacological grade researchers doing contract work for drug firms.
Not to be left out, UC San Diego is hoping to “disrupt the silos” with its neighbors and promote more regional cooperation, said Dr. Gary S. Firestein, a dean who directs the university’s Clinical and Translational Research Institute. There has been some success at increasing collaboration, he said, but “we need to really double down.”
It will not be easy.
About a year ago, BIOCOM, the local life science trade group, held a social event after opening its strategically positioned new office on Torrey Pines Mesa. Major institute representatives mostly stuck to their own groups, an attendee recalled, eyeing one another warily from across the floor, like kids at their first school dance.